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Singapore Brokerage Houses: Guide To Investing In Overseas Stock Markets

Choosing the right broker goes beyond fees. Access to the markets you wish to invest in is another important criteria.

 

The world is becoming a much smaller place with the connectivity we enjoy today. Many Singaporeans regularly travel to cities across the globe, buy products only available in foreign economies and use content and digital platforms created overseas.

Yet, to many, investing in companies such Facebook, Alibaba, Cathay Pacific, Nestle or News Corp, seems like a world away. In fact, these are large multinational companies listed in major stock markets in the world, including the USA, Hong Kong, Switzerland and Australia. And we can invest in them through our brokerage houses in Singapore.

Read Also: Step-By-Step Guide to Stock Investing in Singapore

Markets Available On Brokerage Houses In Singapore

There are many reputable brokerage houses in Singapore, and majority offer us the option to invest in overseas stock markets. Below, we’ve compiled a list of local brokerage houses and the overseas stock markets they allow us to invest in.

Once you decided on the brokerage that gives you access to the markets you want, you can head over to their individual websites:

Phillip Securities (POEMS)

Maybank Kim Eng

KGI Securities

Saxo Capital Markets

CIMB Securities

Standard Chartered Bank

OCBC Securities

UOB Kay Hian

DBS Vickers

FSMOne

Citbank Brokerage

This list was compiled in a descending order of how many brokerages served a particular exchange. You should also note that this list is not exhaustive. What this means is that some markets, which Singapore brokerages may serve, isn’t listed as they may be less popular or that the brokerages simply listed that they served all global markets (in the case of KGI Securities).

As you can tell, investing in American and the Hong Kong stock exchanges is popular among Singapore investors with all the local brokerages offer this market via its online trading service. The next most popular exchanges are Australia (ASX), London (LSE) and Japan (TSE). ASX is a nearby market which many Singaporeans frequent, while the LSE and TSE are within the top 10 largest markets in the world.

Read Also: 10 Biggest Stock Exchanges In The World: Here’s How Much They’ve Gained In 2017

Interestingly, nearby ASEAN markets such as Malaysia’s Bursa, Thailand’s SET, Indonesia’s IDX were not as widely available as more distant markets such as Germany’s XETR and Canada’s TSX. However, if you look at circumstances more carefully, you’d notice that they are offered on more online platforms whereas XETR and TSX was more widely available offline.

Interestingly, even though China offers an interesting investment proposition for many investors, they are not widely offered. In part, this may be due to the fact that both Shanghai’s and Shenzhen’s “A” shares have tight controls over it, even though it is slowly opening.

Read Also: How To Diversify Your Investment Portfolio Outside Of Singapore (Via SGX Listed Companies)

The brokerages are also ranked in descending order, which means Phillips Securities offer the widest coverage while Citibank offers the least. Again, this is a general depiction of the brokerage houses, and some of them may offer more markets via offline channels.

Charges That You May Incur

Another thing you should note is that you will definitely be subjected to higher fees when you’re investing in foreign markets than when you purchase shares listed locally. The main reason is that you’ll most likely have to keep these shares in a custodian account with the brokerage you bought it with.

Some brokerage fees that you may be slapped with include, but may not be limited to:

# 1 commissions

# 2 currency conversion rates

# 3 custodian (or maintenance) fees

You may also have to pay a fee for corporate actions such as:

# 4 taxes from handling dividends

# 5 fees from handling rights issue or stock dividends

# 6 taxes, in the form of clearing fees, from the country you’re buying from

You also need to be aware of

# 7 currency fluctuations

# 8 any political or credit risks associated with the foreign country

# 9 transferring stocks to a different broker

Read Also: How Singaporeans Can Start Investing In The US, Hong Kong Or Other Major Overseas Stock Markets

While many of these charges are small, they can add up, sometimes over years, to impact your overall overseas investment returns.

Start Investing In Overseas Stocks Today

We’re definitely not advocating that you turn a blind eye to stocks listed in Singapore. However, if you start to invest in overseas stocks as soon as possible, you can enjoy many benefits. Namely, you’re forced to learn more and gain insights into the process.

Starting early usually also means starting with less. This is a good thing if you’re figuring your way around with the “what’s the worst that could happen” mentality. If you already have a sizeable amount to invest, consider investing in Singapore-listed stocks if you’re more familiar with it, and get your feet wet through overseas stock investments.

Lastly, you’d be diversifying your holdings in new markets, new geographical regions and new businesses. This will help lower your overall portfolio risk.

Of course, this is not a magical solution to your investment success. You still need to stay prudent, continue monitoring your investments and continue your learning journey.


 
 

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